Bag makers see business in plastic ban

After a ban on plastic bags, biodegradable (not to be confused with ‘degradable’) is the only kind of plastic bags allowed in Delhi and its makers — all located in Chennai and Mumbai — are scrambling to get a slice of this potentially huge pie.

Two of the only three makers of such bags in India are looking to set up manufacturing units here and are hunting for suitable distributors. The government is also keen on giving tax sops to them.

“We will be in Delhi next week to meet the Chief Minister and discuss issues related to the ban and opportunities for eco-friendly plastic bags. We had supplied garbage bags to the Delhi government a year ago for the Bhagidari scheme, so we are familiar with this (Delhi) government,” said Perses Bilimoria, founder of Mumbai-based Earthsoul India, which has already started the process of setting up a factory in Haryana.

Recently Bilimoria was in the committee of experts at the Bureau of Indian Standards to formulate standards for biodegradable plastics.

Chennai-based Harita NTI, an arm of the TVS Group, has been flooded with business queries from Delhi and considering making a facility here.

“The demand is going to be huge, and creates room for more than one player. The Delhi government is forming favourable policies for this industry,” said Dr Sunder Bala Krishnan, head of NatureTec, the biodegradable plastic bags division of Harita.

With the entry of these players and room left for more, the price of biodegradable bags is expected to come down.

“A standard size, 40-micron thick bag costs around Rs 5. But with VAT waiver, it could be a rupee cheaper. Also, bigger the market, cheaper the price,” he said.

Steep prices have so far been an obstacle for these bags to find takers. The ordinary plastic bags are a third in prices.

But last week Delhi environment secretary J.K. Dadoo announced that the government has proposed to the VAT Commissioner for an exemption to these bags.

The government has also written to the Customs Collectorate for slashing excise duty on import of raw material for such bags.